LLC Membership Does Have Its Benefits
So, you’ve decided to incorporate your business. Great idea! Operating as a sole proprietorship, meaning without a legal entity, can open you up to all sorts of personal liabilities. Maybe you’re already operating, or maybe you’re starting a new business. Either way, when looking to incorporate, you really want to at least consider forming a limited liability company (LLC) as opposed to a corporation. Albuquerque Business Law can advise you as to which business structure will best suit your needs, but for most small businesses with no investors, LLC membership benefits abound.
A Limited Liability Company protects its members, or owners, from personal liability in most circumstances. It is a pass through entity which means that the LLC itself is not taxed. Instead, all federal income taxes are passed to the LLC’s members and are paid through their personal income tax. This is different from a C-corporation where profits are taxed and distributions to shareholders are taxed. The requirements to form and maintain an LLC are simpler and easier than those required of a corporation. There are many LLC membership benefits to forming this type of business entity. Let the attorneys at Albuquerque Business Law help you form your LLC and other small business needs.
What you need to know to form your LLC
You will need to choose a business name. It must be different from any existing LLC in the state. The structure must be noted in the name, containing the words “limited liability company” or “limited company”. Certain abbreviations such as “LLC”, “L.C.”, or “Ltd Co.” can also be used. The name must not contain any words restricted by the state (bank, insurance, etc.). It is also wise to search existing business both locally, statewide, region wide, and potentially nationwide to make sure no one is operating with that business name. Expanding your search range is especially important if you decide to grow outside of the State of New Mexico.
You will need to file Articles of Organization. This document legally establishes your LLC. One LLC membership benefit is the minimal state filing fee.
Regardless of your particular LLC and its structure, you will need an Operating Agreement. It structures your LLC’s finances and organization and provides rules and regulations for smooth operation. Operating Agreements usually contain percentage of interests, allocations of profits and losses, member’s rights and responsibilities and other provisions. Once your business is registered you must obtain business licenses, permits, and/or tax numbers.
At Albuquerque Business Law, we take care of all steps of the formation of LLCs, from the filing of the Articles of Organization to the preparing of the Operating Agreement and preparation of business license applications. Let the skilled and at Albuquerque Business Law help you properly and strategically form your LLC to ensure the members are fully protected from liability and are able to reap the most benefits.